Property market 'heading for a fall in 2008'

mystic_trev · 2 April 2007 at 8:34PM

typeractive wrote: »

If house prices were to plummit there would be plenty of people ready to buy them for a 'bargain' price.

This happened during the last crash and happens during any financial correction. There are people who will try to call the bottom of the market and buy in, to secure a bargain, therefore prices will stabilise and even rise. However a downward trend can continue, again with people trying to buy bargains as the markets decline. As with a rising market it's difficult to call the top, with a declining market it's difficult to call the bottom and often referred to as trying to catch a falling knife!

Alfie1999 · 2 April 2007 at 8:37PM

Falling house prices are a good thing for the vast majority of people except perhaps:

1. BTL parasites
2. Those looking to downsize
3. Banks
4. Those who've taken 95%+ mortgages

If you want to move up the 'ladder' then falling house prices reduce the distance to the next 'rung'.

Great news!

typeractive · 2 April 2007 at 8:55PM

yeah - perhaps. I mean the way I look at it. If I buy a place for say £70k. It's a flat and I don't want to live there forever. Say short term - 5 years.

Now I will not have paid the whole thing in 5 years - unless I win the lottery lol. So say I put my deposit in of around 12k and start paying my mortgage. If houses plummit in value and so does the flat, then what will I lose? Not a lot really. If it devalued to an extremity of half - £35k, I still would not have paid this amount off. I could sell it and reap back the investment, and have had the opportunity to live there for say 5 years.

The thing I would lose is the opportunity make money: a profit.

I know I am just looking at my personal scenario, which is a bit rude really. Others may be affected in a different matter.

One thing I bare in mind is that after the Newcastle riots back in 1991 houses would not seel at all. A housing lecturer told me they were on sale for £1 (as to if this is an exaggeration I don't know)....anyway it was severley hit, but now they are worth around £150k+ in that area.

ds1980 · 2 April 2007 at 9:13PM

A great read....im still not convinced. If they fall say 30% will that mean a million pund home will be worth £700 k i don't think so.

Im buying 1 more and hoping to have it on the market asap. Will be interested to see what happens wth HIPS. My view is that i might just have got it right. Bought late last year selling in a couple of weeks made a quick £30k. Putting that into new house and hoping to have the new one back on after HIPS are brought in as i think the prices will stagnate while people get to grips with them and then go up as fewer will be on the market.

I do not envisage price sto fall anytime within the next two years as i can't see interest rates going that much higher.

In any case if we can't sell on at a good price we'll quite happily stay where we are until we can.

Generali · 2 April 2007 at 9:24PM

ds1980 wrote: »

A great read....im still not convinced. If they fall say 30% will that mean a million pund home will be worth £700 k i don't think so.

Im buying 1 more and hoping to have it on the market asap. Will be interested to see what happens wth HIPS. My view is that i might just have got it right. Bought late last year selling in a couple of weeks made a quick £30k. Putting that into new house and hoping to have the new one back on after HIPS are brought in as i think the prices will stagnate while people get to grips with them and then go up as fewer will be on the market.

I do not envisage price sto fall anytime within the next two years as i can't see interest rates going that much higher.

I'd be interested to know why you believe this. If house prices can double then they can halve, right?

ds1980 wrote: »

In any case if we can't sell on at a good price we'll quite happily stay where we are until we can.

Of course the value of your house matters only twice, the day you buy and the day you sell. If you can buy some happiness with the purchase of your house it's a fantastic investment.

Guy_Montag · 2 April 2007 at 9:27PM

ds1980 wrote: »

A great read....im still not convinced. If they fall say 30% will that mean a million pund home will be worth £700 k i don't think so.

but that house cost £700k two or three years ago (& probably £350k a decade ago), why should it not drop back to that value, that's pretty mild compared to the overall jump.

lynzpower · 2 April 2007 at 9:30PM

One thing I bare in mind is that after the Newcastle riots back in 1991 houses would not seel at all. A housing lecturer told me they were on sale for £1 (as to if this is an exaggeration I don't know)....anyway it was severley hit, but now they are worth around £150k+ in that area.

actually, I lived around the corner from this street in question.

Basically it was a row of terraced flats (if youve ever lived in Newcastle youll know what stle they are, not warner but similar) the council owned them, but they were all derelict, and the council did nt have the finace to refurbv them. They were sold for 50p each. HOWEVER, as I recall, each buyer had to a) have minimum of 25k in cash to pay for refurbs- needed the lot including rooves b) were not allowed to let them out for 5 years. It was a question of the council offloading losses.

AH HERES THE INFO http://www.emptyhomes.com/rescue/campaigning_on_empties.html

5. Does the Council operate a 'homesteading' scheme? There are areas across the country suffering from low demand for housing. In some cases streets upon streets of good quality housing stands empty. These empty properties are a financial burden to the Council or housing association that owns them. The Council is able to dispose of these properties for a nominal sum - having sought permission form the Secretary of State - to provide housing for local people. Newcastle City Council set up a very successful scheme. They offered flats for properties for sale for 50p each. The conditions attached were that the chosen applicants were local families with at least three children (indicative of a particular housing resource shortage), they must buy two flats and be able to raise a mortgage for the considerably reduced purchase price. The Council paid for the flats to be converted into single houses and to be refurbished completely. The result was families with houses, a regenerated area as a result of the refurbishment and re-occupation and a cure for the Council's financial headache

People recall this as a major event, not really, it was one street and not a particularly good one at that. I lived in a flat a few streets away same style and at that time "refurbed" were selling around 25k- 35k

Gorgeous_George · 2 April 2007 at 9:30PM

Alfie1999 wrote: »

Falling house prices are a good thing for the vast majority of people except perhaps:

1. BTL parasites
2. Those looking to downsize
3. Banks
4. Those who've taken 95%+ mortgages

If you want to move up the 'ladder' then falling house prices reduce the distance to the next 'rung'.

Great news!

1. BTLers are not parasites. They are gamblers and often workaholics. Gambling that tenants will pay the agreed rent and leave the house in the agreed condition at the end of their agreed tenancy period. Many gamble that prices will rise. Without BTLers many people in short term employment or who move jobs regularly, would be unable to have a home. For my modest returns I have redecorated a 4 bedroomed house so that it could be re-let after the parasites who rented it left it it in a mess and owing rent.

2. Agree

3. Possibly but I didn't see many go out of business last time there was a price 'crash'.

4. Agree. I'd even extend it to those on fixed rates that come to an end sometime after the 'crash' starts. There only option may be to stick to their lender's SVR leading to hardship/reposession.

And I'd add:

5. Gordon Brown. Lower tax income from VAT and Stamp Duty. Obviously, this affects the whole country as taxes need to rise elsewhere to fund the shortfall.

6. All those hoping for a substantial inheritance.

With a rising population and an over generous welfare state, demand for housing will increase. ONLY higher interest rates are likely to cause a sharp fall in property prices. Higher inflation and more expensive borrowing will counter some of the joy that FTBers expect to celebrate.

GG

Gorgeous_George · 2 April 2007 at 9:37PM

Generali wrote: »

http://www.askbm.co.uk/aboutbm/news.asp?n=&w=&id=772&g=1

Any ideas of what would happen to house prices if BTL demand was removed for the most part?

There would be more people looking to buy their own homes (former BTL tenants).

Why are housing associations and the councils spared the venom directed to BTLers?

Maybe renting should be illegal. Would this rid you of your jealousy?

GG

roswell · 2 April 2007 at 11:00PM

And in responce to Lynz`s post, they were all purchased by one person (well him and his family) I think they were all done up and let to students.

Property market 'heading for a fall in 2008'

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